Section 351 Transfer Statement Example

You receive stock with a fair market value of 20 000 you also receive 10 000 in cash the property you transferred was subject to a mortgage of 6 000.

Section 351 transfer statement example. For more information see section 1 351 3 of the regulations. In 1997 congress amended section 351 to exclude the receipt of. 351 under certain circumstances as long as the services are deemed ancillary and subsidiary to the transferred property.

Every significant transferor must include a statement entitled statement pursuant to 1 351 3 a by insert name and taxpayer identification number if any of taxpayer a significant transferor on or with such transferor s income tax return for the taxable year of the section 351 exchange. Another section under. You transfer property with an adjusted basis of 20 000 to a corporation for stock.

2003 51 issue whether a transfer of assets to a corporation the first corporation in exchange for an amount of stock in the first corporation constituting control satisfies the control. Here s an example of a partially taxable exchange under section 351 b. Section 351 transfer to corporation controlled by transferor 26 cfr 1 351 1.

Both the corporation and any person involved in a nontaxable exchange of property for stock must attach to their income tax return a complete statement of all facts pertinent to the exchange. A version of section 351 has been included in the internal revenue code since the revenue act of 1921 2 in 1989 congress amended section 351 to repeal non recognition treatment for securities received by a transferor in the exchange. Attach a statement to your tax return.

Immediately after the transfer you control the corporation.